Take your bite out of the AAPL
Posted on January 14, 2006
Filed Under Apple |
This Apple Is Too Shiny - Forbes.com
I’ve been saying this for months, and dispite the recent run up in stock price, the cost of the stock is much higher than the intrinsic value of the company.
As the article describes, the excellent profits last quarter were an accounting fudge dealing with taxes (a legal fudge, but fudge nun the less).
The current exponential growth in digital audio devices is 1) unsustainable, and 2) low-margin. At MWSF, $5.7 Billion in revenues, but what were the profits? Apple expects to sell 150,000,000 songs this year at the iTMS. That is $148,500,000 in sales, and only $4,500,000 in pre-tax earnings. My research tells me not to get in now, stay in until after it has peaked (better than getting out early, and it won’t free-fall in one day). But you should do your own research and make your own decision. But do the reseach and don’t get caught up in the hype.
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